Rupee trading lower, Chinese Yuan little changed

Thursday,   14-Feb-2019   12:24 PM (IST)

The Indian rupee is trading lower at 70.94/95 levels (12:15 pm) in the afternoon deals after touching the low of 70.9950/71.0050 levels after crude oil prices rose and the dollar index rebounded on higher-than-expected core U.S. inflation data. However, some disinvestment-related inflows are expected today keeping further losses in check. So far rupee traded in the range of 70.80-70.9950 levels. Wholesale prices in India eased to 2.76 percent in January, as compared to 3.80 percent in December, due to cheaper food and fuel prices, data released by the commerce and industry ministry showed. WPI Inflation data for November has also been revised to 4.47 percent from 4.64 percent earlier. The frontline indices are trading in a range with negative bias. At 12:10 PM, the S&P BSE Sensex was trading at 35,913 down 121 points, while the broader Nifty50 was at 10,749, down 45 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.50-71.20 levels. Rupee has an immediate support at 71.00 levels. A breach of the same may see rupee at 71.10 followed by 71.20 and 71.30 levels. On the positive side rupee is likely to face resistance at 70.80 levels and if it is able to break the same then it may gain up to 70.70 levels followed by 70.61 and 70.52 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.14%, 4.17% and 4.02% respectively.

The Chinese Yuan was little changed on Thursday in Asia even after custom data showed a better-than-expected trade numbers in January, as analysts warned the presence of business distortions due to national holidays and cyclical trends. January exports unexpectedly grew 9.1% from a year earlier, beating the expectation of a 3.2% drop, data from China’s General Administration of Customs showed on Thursday. Imports also only fell 1.5%, much less than the expected 10% fall and narrowing from December’s 7.6% drop. That left the country with a trade surplus of $39.16 billion for the month, better than forecasts of $33.5 billion. The data seemed to have little impact on Chinese stocks and the yuan today. Some analysts cautioned that data published in the first months of the year must be treated with caution, as they generally looked better due to seasonal factors and business distortions caused by the long Lunar New Year holidays. Looking ahead, investors will likely focus on the outcome of the latest round of trade negotiations with the U.S., which is scheduled to conclude on Friday in Beijing. Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies slipped 0.1% to 96.893. The Labor Department said on Thursday its consumer price index was flat for January, after edging up 0.1% in the prior month. But core CPI, which excludes food and energy, rose 2.2% for the year through January, above forecasts for a 2.1% increase.